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Coronavirus prompts VW to stop production throughout Europe

FRANKFURT — Volkswagen Group, the world's biggest carmaker, is suspending production at factories across Europe as the coronavirus pandemic hits sales and disrupts supply chains, the company said on Tuesday. The German carmaker, which owns the Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda brands, also said that uncertainty about the fallout from coronavirus meant it was impossible to give forecasts for its performance this year. "Given the present significant deterioration in the sales situation and the heightened uncertainty regarding parts supplies to our plants, production is to be suspended in the near future at factories operated by group brands," Chief Executive Herbert Diess said on Tuesday. Volkswagen's powerful works council concluded it was not possible for workers to maintain a safe distance from each other to prevent contagion and recommended a suspension of production at its factories from Friday. Production will be halted at VW's Spanish plants, in Setubal in Portugal, Bratislava in Slovakia and at the Lamborghini and Ducati plants in Italy before the end of this week, Diess said. Most of its other German and European factories will prepare to suspend production, probably for two to three weeks, while Audi said separately it would halt output at its plants in Belgium, Germany, Hungary and Mexico. Volkswagen's vast factories in Chattanooga, Tennessee, in Puebla, Mexico, and plants in Brazil were not affected, but that would depend on how the coronavirus spreads, VW said. Volkswagen has 124 production sites worldwide of which 72 are in Europe, with 28 in Germany alone. "2020 will be a very difficult year. The coronavirus pandemic presents us with unknown operational and financial challenges. At the same time, there are concerns about sustained economic impacts," Diess said.   Production in China resumes Volkswagen Group sold 10.96 million vehicles last year, putting it ahead of Toyota based on the latest figures from the Japanese carmaker. Globally, VW employs 671,000 people and it delivered 4.86 million vehicles to European customers in 2019. Only last month the car and truck maker based in Wolfsburg, Germany, predicted that vehicle deliveries this year would match 2019 sales and forecast an operating return on sales in the range of 6.5% to 7.5%. "The spread of coronavirus is currently impacting the global economy. It is uncertain how severely or for how long this will also affect the Volkswagen Group.

Mystery shoppers love Infiniti, hate Tesla

Infiniti, followed by Lexus tied with Mercedes-Benz took the top two spots for best sales experience according to mystery shoppers from the latest Pied Piper Prospect Satisfaction Index, while EV manufacturer Tesla recorded the lowest overall score. Not surprisingly, premium brands dominated the top ranks. Including the three already mentioned, luxury brands occupied seven of the top ten spots and included Audi, BMW, Porsche, and the only American brand to crack the upper echelon, Cadillac. Toyota, Volkswagen, and Nissan rounded out the first ten positions. The news for domestic automakers isn't good. Aside from Caddy, the only other star-spangled automaker to score above the industry average is Chrysler. The rest of FCA, most of GM, and all of Ford fell below the line. But Pied Piper's mystery shoppers handed Tesla the biggest walloping – the company is ten full points below the next lowest brand, Volvo, and its score of 86 is 17 below the average of 103. It's baffling, considering the company's touted direct-sales model. "Tesla leaves me scratching my head," Fred O'Hagan, Pied Piper's president and CEO, told Wards Auto. "They own all of their stores, so you would think each one would be doing the same thing. But they're not. Tesla is consistent in its inconsistencies." O'Hagan added that there's a "huge variation" in Tesla's store-to-store effectiveness, and that in some cases, shoppers found showroom workers that acted more like "museum curators," Wards Auto reports. It might be popular to call Tesla the Apple of the car world, but based on Pied Piper's work, the brand has a long way to go to emulate the uniform shopping experience of an Apple Store. The news might be bad for Tesla, but even for the brands that scored below average, there's cause for celebration. Only Tesla and Mini lost points in this year's rankings, and only Mercedes and Lincoln held steady. Every other brand, including Infiniti, which topped the index for the first time, gained at least one point. The biggest improvements belong to Porsche, Land Rover, and Mitsubishi, which all jumped five points. Pied Piper's annual Prospect Satisfaction Index uses mystery shoppers – over 6,100 this year – from across the country to assess dealers and generate rankings from over 50 individual factors. News Source: Pied Piper via WardsAuto Green Audi BMW Cadillac Chrysler Infiniti Lexus Mercedes-Benz Nissan Tesla Toyota Car Buying Car Dealers study

VW Group to split brands under four holding companies

The Volkswagen Group is planning a tremendous shift in its internal structure that will decentralize operations by splitting its 12 brands into four different holding companies. Here's the breakdown. Things will be split logically, considering the inter-sharing of parts, platforms, and engines. The Volkswagen brand, Seat, and Skoda make up a passenger vehicle division led by former BMW man Herbert Diess. Audi, which is tightly intertwined with Lamborghini and motorcycle manufacturer Ducati, will be managed by current Audi exec Rupert Stadler. Porsche and Bentley, which are already quite close, will be joined by Bugatti and run by Matthias Mueller. Finally, a commercial vehicles division will include Volkswagen Commercial, Scania, and Man. Former Daimler exec Andreas Renschler will take care of the big vehicles. The massive move, according to Automotive News Europe, is part of an internal VAG effort to move away from the structure established by ousted Chairman Ferdinand Piech, who favored a compact, but highly centralized, management structure to oversee the independent actions of the company's brands. Criticism of Piech's arrangement stemmed from the company's slow responses to changes in the market, ANE reports. The new structure should make for a more efficient, streamlined company that's better able to make crucial decisions. What are your thoughts? Should VAG decentralize, or did Piech have the right idea? Have your say in Comments.